What if I can’t pay my debts because of coronavirus?
Find out which debt solution is right for youGet started
Answer a few simple questions
See if you are suitable
Understand your next steps
Being frugal and cutting back is essential if money is tight, and especially if you’re managing problem debts. Check out our guide on how you could save on your mobile phone bill.
You probably consider your mobile phone to be an essential part of your life, especially if you need it to contact your family or for work. If you’re managing problem debts, you may also need it to keep in touch with your lenders. However, your mobile can cost you a lot of money, with some contracts for newer smartphones costing around £40 a month. Every penny helps when your finances are stretched, so here’s how you could save on your phone bill.
Contract or pay-as-you go
Nowadays, most mobile phone users are tied into contracts as they can’t afford to pay for an expensive smartphone outright. In fact, 71% of UK phone users now have a smartphone, with only the few still using basic feature phones on Sim-only deals or pay-as-you-go. 12, 18 or 24 month contracts usually mean that you’ll end up having to pay more for the phone than if you’d bought it upfront. If you’re coming to the end of your existing contract, consider if you really want to lock-in for another 12 months, or even longer. You might be able to afford to budget for it now, but if you have problems with budgeting or repaying what you owe over the next year, you could struggle to manage the cost.
Sim-only contracts are usually used by people who already have a phone handset that they want to keep and usually rollover from month to month. You keep the same Sim but you can usually switch to better tariffs more frequently. If you’re trying to save money, this could be a good idea, as you don’t have to be tied in for a year like you would on standard contracts … meaning you would be able to switch to better deals.
Pay-as-you-go … only paying for the texts, calls, or internet data you use … can be a way to save money, but not if you use your mobile a lot. If you’ve had problems with keeping up with your repayments in the past, it may be suitable for you to go on pay-as-you-go, as this won’t require a credit check. Mobile phone contracts usually require a credit check, so if you have late or missed payments on your credit history, you might not get accepted. However, if you decide that you want to go for a pay-as-you-go deal, you need to keep a close eye on how you’re using your phone, as you could use up credit pretty quickly. See if your network provider can offer you any add-on deals … such as unlimited free texts or a set number of extra minutes if you top up a certain amount each month.
Looking to switch
When you come to the end of your contract, call your network provider and see if they can offer a better deal for you. If you look around at what deals are available on other network providers first and mention this, they may match the price for you. However, if they can’t do this, let them know how much you’re willing to spend per month. You may have to drop to a more basic package … such as less internet data or call minutes … but you will probably be able to save quite a bit based on what you currently spend.
To find the best deals available to you, log on to billmonitor, which will analyse how many texts, calls, and how much internet you’ve used over the last three months. It will then be able to advise you what the best package for you is. For example, you may not be using all of the minutes you pay for, so you could benefit from this by switching to a better deal. If there’s a cheaper deal available on a different mobile network, check that the network will provide good coverage in your area through Ofcom, so you won’t struggle to get a signal for making calls or sending texts.
If you are struggling with problem debt, you will probably look to cut back on spending in all areas of your life. You can do this with your phone too, so look at how you can reduce how much you spend on any extras for your mobile. If you pay for insurance on your mobile, consider if you really need it. Is your phone a brand new smartphone that would cost £500 to replace, or are you coming up to the end of your contract and due an upgrade anyway? If you’re on a contract, make sure you don’t go over your text, call, or data allowances; otherwise you’ll start to incur extra charges. Even if you’re on an unlimited usage package, this doesn’t always mean it’s 'unlimited’. For example, 'unlimited minutes’ is usually around 3,000. Although this is a lot, if you have to spend a few hours a day on the phone trying to sort out your debt repayments, it can start to build up.
Whenever you’re at home, make sure you connect your phone to your Wi-Fi so you don’t use up your mobile data. You can also connect to public Wi-Fi hotspots in some restaurants or train stations to save your 3G, but be careful that you’re not accessing any financial or sensitive information when you do this, otherwise anyone else using that hotspot may be able to access it.
Reducing non-essential spending can help you if you need to sort out your finances, but if your debt is becoming unmanageable, you may want to look at cutting back more seriously. Think about trying to contact your lenders to see if you can work out a repayment plan with them, or a debt expert could do this on your behalf.
by Shelley BowersBack to blog home